ML20149G851
| ML20149G851 | |
| Person / Time | |
|---|---|
| Site: | 05200004 |
| Issue date: | 10/28/1994 |
| From: | Marriott P GENERAL ELECTRIC CO. |
| To: | Taylor J NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM), NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| References | |
| FRN-60FR14670 AF07-1-051, AF7-1-51, MFN-136-94, NUDOCS 9411080116 | |
| Download: ML20149G851 (5) | |
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GENuclear Energy i
P. W. Marriott, Manager GeneralElectnc Company Ac'vancodPiant Technologios 175 Curtner Avenue. MC 781 San Jose CA 95125-1014 f
408 925-6948 (phone) 408 925-1193(facsimile)
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l October 28,1994 MFN No.136-94 PWM-9442 Docket STN 52-004 l
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Document Control Desk U. S. Nuclear Regulatory Commission Washington DC 20555 j
Attention:
James M. Taylor Executive Director for Operations
Subject:
Docket No. 52-004: Review of Fee Billing Practices
Dear Mr. Taylor:
i This letter responds to D. M. Crutchfield's letter of September 14,1994, advising us that the NRC Staff is reviewing its fee billing practices related to technical support and confirmatory research activities supporting design certification applications.
Although your letter did not explicitly request comments, we are pleased to comment as follows.
The current regulations,10 CFR Part 170, provide that the cost of reviews of applications for NRC approval of standardized reactor designs shall be borne by the applicants as incurred. However, the costs associated with the NRC's confirmatory testing of the generic safety concepts involved has been covered indirectly through annual fers on power reactor licensees under 10 CFR Part 171. We understand that because cf the large cost associated with the projected testing of the AECL, CANDU design - a design unlike the light water reactor (LWR) designs of all current power reactors in the U.S. - the Commission is concerned about charging power reactor licensees for that cost and, relatedly, is considering whether a change in fee policy is necessary with respect to the confirmatory testing associated with all standard plant applications, including the General Electric SilWR and Westinghouse AP-600. We do not believe that any change in the current regulations with respect to treatment of passive light water reactor designs is necessary or desirable. On the other hand, we think that the considerations underlying the current fee regulations contemplate that reactor concepts other than light water reactors and, perhaps, high temperature gas cooled reactors as well, should be treated differently.
The Commission's reasoning for including the cost of light water reactor research in the annual fees of power reactor licensees is set forth in the Statement of Considerations accompanying the 1991 adoption of NRC's fee schedules. The NRC stated:
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GE Nuclear Energy Dennis M. Crutchfield 2
October 28,1994 First, part 171 has been expanded to include additional costs that are attributable to power reactors other than those costs that have presiously been included in the annual fee Ihr operating power reactors. These additional costs include the costs of generic activities that nrovide a ootential future benefit to utilities currentiv oneratine reactors. These generic activities are associated with.... standardization... 56 FR 31484 (Emphasis supplied).
The intent of this provision is further clarified by the NRC's discussion earlier in the Statement of Considerations. After deciding that the cost of standardized design reviews would be charged to the applicants, the NRC stated that the budgeted cost of advanced reactor research would be included in the operating power reactor annual fee.
This rationale makes eminently good sense for the passive light water reactor designs, but does not work for unfamiliar designs with no correspondence to nuclear power plants now operating in the U.S. The costs to be covered by Part 171 annual fees are those that provide " potential future benefit to utilities currently operating reactors."
The research on passive LWR's clearly has the potential to benefit those reactors and their operating utilities, as well as the NRC's capacity to regulate their future activities.
For example, the safety analysis methods used by the NRC for passive plants are ectually applicable to operating plants. The NRC's testing programs will provide data to verify these models. Confirming this perceived benefit to U.S. nuclear utilities (i.e.,
those paying the Part 171 annual fees) is the fact that development and certification of both the GE and Westinghouse passive LWR designs are being supported by substantial funding from the U.S. nuclear utility industry as well as from the U.S.
Department of Energy.
I The funding of research for the AECL filing is a totally different matter. The technology is completely different from that employed in any U.S. reactors. Unlike generic research on the GE and Westinghouse passive designs, there is no record j
hasis to believe that research done in support of the certification of the AECL heavy water reactor design has any " potential future benefits" to U.S. utilities currently operating reactors under NRC licenses. Quite the contrarv, there is no significant interest by U.S. utilities in the AECL technology or product. The U.S. utility-sponsored Advanced Reactor Corporation's April,1994 report, "The U.S. Advanced Reactor Development Program," mentions CANDU only once, and only in the context of "the growing competitiveness of overseas nuclear supply companies, particularly from countries with federally supported reactor development programs... " (p.8)
A justification for charging domestic power reactor licensees for research testing related to the AECL product is totally lacking. In fact, the benefits would appear to flow instead to the parties financing the AECL reactor, i.e., the Canadian government, and perhaps to Canadian and other non-U.S. utilities that use, or may in the future order, heavy water reactors rather than U.S.-origin designs.
GENuclear Energy Dennis M. Crutchfield 3
October 28,1994 The U.S. government is funding the passive light water reactor program pursuant to the Energy Policy Act of 1992.
The Act (Sec, 2306) specifically defines the circumstances under which the DOE can fund such a program.
In order for a company to participate in the DOE funding, the Secretary of Energy must find both-(1) that the company's participation would be in the economic interest of the United States; and (2) that the company is U.S. owned or incorporated in the U.S. with a parent entity whose country provides certain equivalent benefits. Clearly, AECL meets neither of these criteria. Apart from it not being a U.S. company,it fails to provide any of the economic benefits set forth in the Act.
In connection with its design certification, it would not be making investments in the U.S. in research, development, and manufacturing; or significant contributions to employment in the U.S. While these criteria are placed on DOE funding and do not apply expressly to the NRC, they provide some guidance by analogy as to when the NRC should consider funding of research for an advanced reactor of potential benefit to U.S. nuclear utilities.
In this case, where the applicant is a foreign corporation, no domestic benents are to be expected, and the applicant is substantially funded by a foreign government that would provide no such funding to a comparable U.S. applicant in that country, there should be no funding of research in support of the foreign company's application. Of course, NRC cannot consider direct funding ofit in any event. But it certainly should not, under these circumstances, consider funding the research through an imposition on U.S. utilities who will not benefit from the investment.
We also wish to emphasize the difTerence in purpose of regulatory research for the CANDU by comparison to US-LWR designs. GE and Westinghouse have conducted, at great expense, research and development testing of suflicient depth that NRC's own test programs are truly " confirmatory" - that is, they provide desirable redundancy to the vendors' own programs but are not strictly required to permit the NRC to conduct regulatory review. This, together with the NRC's familiarity with light-water reactor technology, has permitted the NRC's confirmatory programs to be inexpensive compared to the vendors' programs. On the other hand, in SECY 94-079, the Staff says that "in order to have a comparable level of confidence in the results of its review [of CANDU-3], sufficien t testing, confirmatory analysis, and analytical code development need to occur" and "needs to be available for the stafT to use in its review."
At the time that paper was sent to the Commission, the StaIT recommended that confirmatory research he conducted in the areas of (a) severe accidents, (b) source term, (c) thermal hydraulics, (d) reactor physics, (c) probabilistic risk assessment, (f) fuel behavior, and (g) materials and structural methods; and said "this will give the NRR staff an independent capability for assessing the CANDU-3 design in key areas affecting reactor safety." This wide range of areas of needed research indicates that the needs for CANDU-3 are envisioned a.s much broader than what has been identified for the US-LWR designs. In determining its fee policy for CANDU-3, the Commission should critically distinguish between what is " confirmatory research" 1
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GENuclear Energy Dennis M. Crutchfield 4
October 28,1994 in the US-LWR sense and research which is needed to provide sufficient understanding in the Staff to conduct competent regulatory review of an unfamiliar tech nology.
j Another important difference has to do with encoded technology, that is, computer programs which embody the physics of reactor safety and are verified by comparison with experiment. The USNRC and the national laboratories have developed, at great xpense, computer programs for LWR safety analysis. The expense is justified, not only because regulatory effectiveness is enhanced, but also because these programs have been directly beneficial to the US licensees and certification applicants. Several utilities have adopted NRC-developed public domain programs for use in their own reload fuel licensing analyses. General Electric and Westinghouse use proprietary modifications of an NRC-developed program for analyses of their passive designs. If the proposed " confirmatory research" program for CANDU-3 includes development of encoded technology, special consideration should be given to whether this part of the program provides any benefit at all to US licensees and certification applicants.
In conclusion, the research under consideration by NRC to support the AECL design certification review is clearly not of the type contemplated to be covered by the annual fees on U.S. power reactor licensees. The purpose and extent of the proposed research necessary to support the AECL review is fundamentally different from that involved in the passive light water reactor reviews. A clear distinction should, and must, he made between (1) charging domestic operators of power reactors for research on passive light water reactors from which the operators themselves have indicated they expect to receive potential benefit and which were explicitly contemplated in the promulgation of the regulation and (2) charging them for research of a totally different type on a totally different technology with no current or prospective application to their plants, for the benefit of a foreign supplier that is subsidized in the main by the supplier's government. In this case, a decision to charge the foreign supplier the full costs of any necessary supportive research is fully justified without the need to re-examine the current funding of ongoing passive light water reactor research.
NRC should continue its current policy with respect to passive light water reactor research. There has been no change in circumstances that would justify changing the previous conclusions regarding the funding of this research. The AECL research, on the other hand, represents a new and different situation which appears to have no
" potential future benefit to utilities currently operating reactors"..As such it should be considered a cost to be borne by the applicant, AECL
l GENuclear Energy Dennis $1. Crutchfield 5
October 28,1994 We appreciate your consideration of our views and would be pleased to discuss them in more detail at your convenience.
Sincerely,
/
P. W. h[arriott, hianager Advanced Plant Technologies cc:
D. St. Crutchfield (NRC)
S. St. Franks (DOE)
R. P. hicDonald (ARC)
- 13. AlcIntyre (E)
J. F. Quirk (GE)
J. K. Restrick (GE)
J. Santucci (EPRI)
D. R. Wilkins (GE)
.